7th Pay Commission: Government issued Notification; central govt employees, pensioners to get increased payout for August

The Finance Ministry has notified the salary hike based on Seventh Pay Commission recommendations. This means that lakhs of government employees will receive higher salaries likely from next month. The notification is dated July 25, 2016.  About 1 crore employees and pensioners will benefit from the pay hike, effective from January 1, 2016. 

Here are the key highlights of the notification: 

1) According to the pay new structure, the existing basic pay as on December 31, 2015, shall be multiplied by a factor of 2.57.

2) The arrears shall be paid during the financial year 2016-2017.  

3) The  Seventh Pay Commission's recommendations  on  allowances  (except  dearness  allowance) has been referred  to  a committee, which will submit  its  report  within  four  months. All allowances will continue to be paid at existing rates in existing pay structure. 

4) There shall be two dates for grant of increment January 1 and July 1 of every year, instead of existing date of July 1.

5) The  recommendations  of  the  Commission  for  increase  in  rates  of  monthly  contribution towards Central Government Employees Group Insurance Scheme (CGEGIS) for various categories of employees  has  not  been  accepted.  The existing rates of monthly contribution shall continue.

6) The Finance Ministry will work out a customised group insurance scheme for central government employees.

7) The  recommendations of  the  seventh pay commission  relating  to  interest  bearing  advances  as  well  as interest free advances have been accepted with some exceptions. 

8) Committees  will  be  set  up  by  Department  of  Personnel   to  examine individual,   post-specific and cadre-specific anomalies  arising   out   of   implementation   of   the recommendations of the Commission.

9) A  committee  will be set up to suggest measures for streamlining the implementation of the National  Pension System (NPS).

10) Hike in Salary & Allowances – There are around 47 Lakh government employees in country. As per the report there will be hike in Basic Salary as well as in allowances. Here are the details –

Hike in Basic Salary – 16 Percent

Hike in Allowances – 63 Percent

Overall Hike in Salaries – 23.55 percent

Talking about the allowances, a great news is that there is significant increase in the house rent allowance. It has been increased by 139 percent

• Pension – All the government employees who have retired are focusing on the pension section. The government has also focused equally and decided to increase the pension by 24 percent.

• Minimum and Maximum Salary Fixed – An important step that has been taken is that the minimum and maximum salary has been fixed as per the recommendations. Here are the details: –

Minimum Salary – Rs. 18000 per month

Max Salary (Employees) – 2.25 Lakh per month

Salary of Cabinet Secretary – 2.50 lakh /month

• Health Insurance Scheme – As per the reports, health insurance scheme can be included.

• Annual Increment – An annual increment of 3 percent will be awarded to the central government employees.

• Military Service Pay – Military Service Pay(For Armed Forces) has been fixed to Rs. 15,500 per month